- February 19, 2024
- 15 min read
- Sirion
Introduction
Contract lifecycle management is revolutionizing the enterprise software technology space. And I’m going to tell you why that’s happening, how it could impact your organization and what you need to know about this game-changing tech.
After a rewarding career in research during a truly groundbreaking period for enterprise technology, I recently decided to retire and do some traveling. It didn’t take long to discover that evangelizing for enterprise tech is a habit that won’t be easy to shake. While on vacation in the scenic red rocks of Sedona, I struck up a conversation with a friendly couple. One of them, an attorney, was lamenting that the digital revolution seems to have transformed every area of business except for the contracting process. The frustration she felt was palpable as she shared how the manual nature of her daily tasks are endlessly frustrating. I was pleased to bring her up-to-speed on how an emerging technology called contract lifecycle management (CLM) is digitally reimagining and redefining contracting across multiple industries—and she was thrilled to learn about the power of this transformative platform to significantly improve some of the most important aspects of her work.
The tedious contracting experience of my vacation acquaintance isn’t unique. For far too long, manual contracting processes have taken a serious toll on efficiency, profitability and strategies for businesses of all types and sizes. This is especially true for procurement professionals. There’s an incredible need for effective solutions that make procurement contract work more effective, more streamlined and, ultimately, more beneficial. Procurement leaders around the world are seeking solutions that will allow them to increase their organizational impact by reducing the manual burden of contracts and modernizing contract management processes.
There’s good news: CLM technology is completely changing the way contracting is done—and the way procurement is managed.
A Brief History of CLM
Over the course of my career, I’ve witnessed the emergence of CLM as one of the most exciting advances in modern contracting.
As a practitioner, an analyst and then a team leader of Gartner analysts, I’ve studied, scrutinized, tested and reviewed virtually every enterprise software platform and provider. I’ve advised thousands of end-user organizations on their CLM projects. And I’ve seen CLM go from a niche market to one of the most powerful forces for driving digital transformation on a massive scale. The rise of CLM as a revolutionary platform is nothing less than remarkable.
Let’s begin by considering CLM solutions for buy-side contracts. CLM software arrived on the scene in the early 2000s, mostly in the form of document repositories with basic search, templatizing and reporting capabilities. Larger companies like SAP and Coupa quickly acquired these first-generation solutions (DiCarta, Apptus, Upside Software, Frictionless Commerce, etc.) to expand their product offerings. These acquisitions enabled modest product improvements for suite vendors.
In the 2010s, new CLM vendors emerged with more sophisticated solutions that were easier to integrate with other applications and offered broader capabilities, such as commitment tracking, negotiation support and intelligent search. These improved features stand on more modern UIs and they leverage evolving machine-learning capabilities.
The Mature Market
Today, prospective CLM solution buyers have plenty of options to choose from, including both first- and second-generation platforms. While I expect to see more vendors enter the CLM space — and innovation continue — for at least another decade, the market has achieved a level of maturity. This means that procurement organizations no longer need to rely on outdated and ineffective manual contracting processes. It’s an exciting time for mainstream buyers to move forward with a reasonable expectation of capitalizing on their investment.
So, are you ready to begin your search for the CLM solution that’s right for your organization? You picked the perfect time! The window remains open for companies looking to gain a competitive advantage through their contracting processes. In addition, there are significant opportunities out there for CLM buyers who take time to understand this growing sector and its trends.
Legal, logistics, supply chain and finance colleagues will look to procurement leaders for expertise and guidance in selecting a CLM solution. However, to realize the full benefits, you need to learn from the experience of those who have gone before you. For example, I know that you’re likely to have marginal results with a CLM solution if you take the “easy route” by selecting what a friend at a different company (with a different set of challenges) recommends, or if you simply go with a solution that scores well in an analyst report.
Preparing to drive a digital transformation with CLM starts by considering the state of the CLM industry, trends that drive business value and the pitfalls of those hasty approaches that deliver marginal outcomes. I’ll cover all these topics in depth in this blog series. For now, I’ll address three pain points that have repeatedly impacted procurement leaders before, during or after deployment of their CLM solution.
Get IT Involved Early
First, be sure to invite your IT leadership to the table from the very beginning of your CLM project so you can leverage their expertise for security, upgrade and integration strategy. Even if you plan to work with your CLM vendor directly for the implementation and maintenance of your solution, your IT team’s contributions will prove critical to your success. I recommend you connect with them early and often.
Find the Best Fit
Secondly, in tandem with stakeholder engagement, take the time to understand your sweet spot — know what type of functionality best aligns with your desired business outcomes. You want to find the CLM platform that solves the business challenges you most need to fix. So, you must first understand what those problems are and gain consensus from your stakeholders. From there, you’ll be prepared to find your best-fit CLM solution.
Set Expectations
Finally, I encourage you to acquire a clear understanding of your organization’s needs, and then set appropriate expectations — for your team as well as your stakeholders. As is common with partially mature solution markets, you’re likely to find a stable set of core features but also advanced capabilities that, while offering a significant improvement, are still evolving. If every advanced feature you could think of was ironed out and working well, the market would be fully mature — and the best you could hope to do with a CLM deployment would be to try to catch up with your peers.
Key Takeaways
- You no longer have to bear the burden of manual contracting processes—new technologies are rapidly changing the way Procurement is done.
- CLM has emerged as a powerful engine of digital contract transformation across multiple industries.
- The CLM market has matured to the point where buyers can jump in with a reasonable expectation of capitalizing on their investment.
- Choosing the right CLM platform requires some understanding of what competitive platforms do—and how well they meet the specific needs of your organization.
- Key strategies to prevent pain points from arising: 1) Get your IT team involved early in the CLM selection process; 2) Take inventory of your organizational needs in order to find the platform that best addresses them; and 3) Set reasonable expectations for your CLM solution before making a purchase.
We’re Just Getting Started!
This is the very first entry in my new blog series on CLM, and if your goal is to learn everything you need to know in order to evaluate and select the platform that’s right for your organization, you’ll want to join me as I take a deeper dive off the CLM platform. In future articles, I’ll review enterprise software trends, key industry shifts, the latest features and functionality, and how all of these factors intersect with the rapidly evolving business landscape. I’ll provide hard facts and proven strategies to help you exceed expectations on your CLM journey! Be sure to bookmark the Sirion Legal Library and join me as I shine the spotlight on all the essential elements of a winning CLM selection and deployment.
Debbie Wilson has delivered market-driven insights, strategic vision and expert guidance to leading enterprises around the world for more than three decades. As Gartner’s lead analyst covering procurement and CLM technologies, and later as group leader for procurement, finance and ERP, Debbie became widely recognized as one of the industry’s most respected thought leaders in procurement technology innovation, adoption best practices, vendor selection and automation strategy. Her mission is to share her knowledge, passion and experience to help enterprises identify and deploy the right CLM solutions to transform their contracting.
Newly Available Analyst Report: Gartner CLM Magic Quadrant 2024
Additional Resources
The Evolution Of Contract Management: From Box To Bot
Enterprise CLM Software: 5 Key Attributes
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